GRANT, Senior District Judge.
William Hooks appeals his conviction by a jury of conspiring to defraud the United States in violation of 18 U.S.C. § 371 and of aiding in the filing of a false estate tax return in violation of 26 U.S.C. § 7206(2). We affirm.
This case concerns the unreported, untaxed assets of a decedent's estate. The underlying facts are not in dispute. Appellant Hooks' father-in-law, Floyd Loge, died in Evansville, Indiana, on September 26, 1978, leaving an $8 million estate. Loge's widow, Celia May Loge, and the Citizens National Bank of Evansville were co-executors under the will; the bank administered the estate.
Mrs. Loge and her daughter, Patricia Susan Hooks, turned over to the bank a box of stock certificates and bonds to be included in Loge's estate. When the bank asked Loge's personal broker to determine the market value of those assets, the broker discovered that he was not given ten issues of bearer bonds that had previously been a part of Loge's portfolio. The face value of those bonds was approximately $375,000.00.
The bank questioned Mrs. Loge about this discrepancy, and was told that the missing bonds could not be found. On the assurance that all of Floyd Loge's assets had been turned over, therefore, the bank prepared the federal estate tax return without including those ten bearer bonds in the estate. The return was filed on March 20, 1980.
In 1978, appellant William Hooks was a vice president of the Plasti-Drum Corporation. He asked his employer, Walter Craig, to store some bearer bonds in Craig's safe deposit box because he did not want anyone to know of his connection with the bonds. According to Craig, Hooks said that "the girls" (Mrs. Loge and Patricia Hooks) told Hooks to take the bonds from under Mr. Loge's bed. When Hooks and Craig went to the bank to put the bonds in Craig's box, they chatted with the loan officer of the bank, Patrick Richter. Hooks showed Richter the bonds. Richter told him he could convert the bonds to cash; Hooks responded that the cashing of the bonds would have to be done in such a manner that it could not be connected or traced to him.
Craig placed the bonds in his safe deposit box on October 31, 1978, and removed them, at Hooks' request, on December 1, 1978. Hooks then handed the bonds to Richter and told him to proceed with their plan for cashing them.
Richter approached bond broker Harold Finley with seven bond issues to be negotiated, and asked whether the bond proceeds could be paid by check payable to bearer or to cash. Both Finley and his office manager answered that, because the IRS required records of such transactions, payment had to be made by check to the owner of the bonds. Richter responded, "Well, we are trying to keep them out of a ten million dollar estate."
It is undisputed that the bonds given to Richter for sale by Hooks were the ones missing from Loge's estate, and that their value was not included in that estate or reported on the estate tax return. As a result, $96,564.58 in estate tax was avoided.
Although the government considered Mrs. Loge and Mrs. Hooks to be unindicted co-conspirators who were a part of the plan to defraud the government, Hooks and Richter were the only members of the conspiracy who were indicted. The trial began August 26, 1986, and lasted thirteen days. On September 15, 1986, a jury found Hooks and Richter
Hooks has appealed, contending that (1) the evidence at trial was insufficient to support either count of the conviction; (2) the court's admission of a co-conspirator's statement and exclusion of certain exculpatory hearsay statements were an abuse of its discretion; and (3) the prosecutor's refusal to offer immunity to defense witnesses denied him due process of law. For the reasons presented below, we affirm.
II. Sufficiency of the Evidence
A. 26 U.S.C. § 7206(2): "Aiding and Abetting"
Section 7206(2) of the Internal Revenue Code imposes criminal sanctions against one who
26 U.S.C. § 7206(2).
Appellant Hooks asserts that the government's proof showed only that he concealed and cashed the bonds, and not that he aided or assisted in the filing of a false tax return. Claiming that this prosecution involved a "rare and novel application" of 26 U.S.C. § 7206(2), Hooks insists that one who is not the taxpayer, tax preparer, or supplier of information for the return cannot be charged with aiding and abetting a false estate tax filing.
The appellate standard used to determine whether a jury verdict rests on sufficient evidence is well established. If the reviewing court, considering all the evidence in the light most favorable to the prosecution, finds that "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt," it must affirm the conviction. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); United States v. Marrinson, 832 F.2d 1465, 1469 (7th Cir.1987); United States v. Conley, 826 F.2d 551, 556 (7th Cir.1987).
The essential elements of an offense under section 7206(2) are (1) that defendant
To establish the first element of the offense, aiding and abetting the filing of a false tax return, "there must exist some affirmative participation which at least encourages the perpetrator." United States v. Graham, 758 F.2d 879, 885 (3d Cir.1985), cert. denied, 474 U.S. 901, 106 S.Ct. 226, 88 L.Ed.2d 226 (1985), quoting United States v. Buttorff, 572 F.2d 619, 623 (8th Cir.), cert. denied, 437 U.S. 906, 98 S.Ct. 3095, 57 L.Ed.2d 1136 (1978).
It is well engrained in the law that one who aids or abets the commission of an act is as responsible for that act as if he committed it directly. Nye & Nissen v. United States, 336 U.S. 613, 618, 69 S.Ct. 766, 769, 93 L.Ed. 919 (1949).
Id. at 619, 69 S.Ct. at 769-70.
The government showed that Hooks engaged in affirmative participation to make the common goal successful: He both concealed and liquidated the bearer bonds which were purportedly assets of the Loge estate. The evidence established that Hooks received from Celia Loge the ten bonds that should have been turned over to the tax preparer; that he hid those bonds in his employer's safe deposit box; and that he later cashed the bonds with the aid of his co-defendant Patrick Richter in such a way that they could not be traced back to him or to the estate. As a result, the estate did not include those bonds, Hooks and Richter were the beneficiaries of the proceeds from the bonds, and the Loge estate tax return, which did not report approximately $375,000 in assets, was false.
It is true that there was no direct evidence tying Hooks to the false tax return involved in the substantive count. Yet, as was the case in Nye & Nissen, there is circumstantial evidence wholly adequate to support the finding of the jury that he aided and abetted in the commission of that offense. Nye & Nissen, 336 U.S. at 619, 69 S.Ct. at 769-70. Clearly the government has been defrauded within the meaning of Section 7206(2) when the scheme is calculated to defeat government collection of tax. United States v. McGee, 572 F.2d 1097, 1099 (5th Cir.1978), citing United States v. Haimowitz, 404 F.2d 38 (2d Cir.1968). The scheme herein to defraud the government included both the nondisclosure of estate assets, which resulted in the false tax return and loss of revenue to the United States, and the subsequent cashing of the secreted bonds, which resulted in a gain of revenue to Hooks and Richter. The evidence presented, and the reasonable inferences drawn therefrom, were sufficient for the jury to decide that the defendants' activities constituted aiding and abetting the filing of the false tax return.
To establish the third element of the offense under section 7206(2), the government must also prove that the defendant's act was willful. The Eighth Circuit has recently examined what constitutes a "willful act" under this provision in United States v. Kouba, 822 F.2d 768 (8th Cir.1987):
Kouba, 822 F.2d at 773. See United States v. Foster, 789 F.2d 457, 461 (7th Cir.), cert. denied, ___ U.S. ___, 107 S.Ct. 273, 93 L.Ed.2d 249 (1986). Therefore there must be sufficient evidence that Hooks knowingly concealed the bonds with the expectation that Mrs. Loge, by denying the existence of those hidden assets, could cause a false estate tax return to be filed. See United States v. Williams, 809 F.2d 1072, 1095 (5th Cir.), cert. denied, ___ U.S. ___, 108 S.Ct. 259, 98 L.Ed.2d 216 (1987).
The court finds ample evidence from the record of the scheme to conceal the estate assets from the IRS. Hooks knew that the bonds had belonged to Loge; he intentionally hid them in a safe deposit box that was not his own; he deliberately made several unsuccessful attempts, through his co-defendant Richter, to cash the bonds without identifying himself or Loge; he succeeded in negotiating the bonds only after they were taken from Indiana to an Illinois bank, which disposed of the bonds without divulging the recipient of the proceeds and without disclosing the transactions to the tax preparer who would have included them in the estate. These activities were deliberate, willful efforts to keep the bonds out of the taxable estate of Floyd Loge. The evidence is clear support for the jury's finding of Hooks' willfulness on the aiding counts. See United States v. Zimmerman, 832 F.2d 454, 457 (8th Cir.1987).
Appellant Hooks makes essentially the same argument in a different light: He asserts that the aiding and abetting statute is intended to prosecute those who supply false information to the tax preparer, or those who are under a duty to provide information; therefore, the violation of section 7206(2) actually occurred when Celia Loge decided neither to turn over nor to report the bonds to the tax preparer as part of her husband's gross estate. Under this interpretation of the offense, Hooks' later concealment and liquidation of the bonds was subsequent to, rather than part of, the conspiracy to cause the filing of a false estate tax return and immaterial to that violation.
This theory is similar to the argument presented by the defendant in United States v. Collazo, 815 F.2d 1138 (7th Cir.1987). Collazo had been convicted of aiding and abetting the unlawful possession of stolen checks. On appeal, he asserted, unsuccessfully, that the evidence of aiding and abetting was insufficient because it had demonstrated that he dealt with the checks only after the act of unlawful possession was completed. 815 F.2d at 1144. In both cases, however, the defendants were willing recipients of the illegally possessed evidence which had been passed to them by other conspirators, and the scheme was furthered by their subsequent actions. See 815 F.2d at 1144-45.
The Supreme Court has made clear that the crime of aiding in the fraudulent preparation of a tax return is "committed at the time the return is filed." United States v. Habig, 390 U.S. 222, 223, 88 S.Ct. 926, 927, 19 L.Ed.2d 1055 (1968). The fraudulent return for the Loge estate was filed March 20, 1980; the bonds were concealed and sold by March 1979.
Moreover, Hooks' attempt to narrow his own involvement to the mere liquidation of assets while Mrs. Loge actually conceptualized the scheme and performed the illegal act of assisting in the preparation of a false tax return must fail. There is substantial evidence in the record that establishes a common scheme to withhold the bonds from the tax preparer, whether the purpose for that nondisclosure and concealment was to obtain less estate tax liability or more personal profit. Hooks' deliberate concealment of the existence and sale of the bonds, the true owner of the bonds, the amount of the proceeds from the secret sales, and the recipient of those proceeds did in fact keep those amounts out of Loge's estate, thereby reducing the collection
The court finds the government's application of section 7206(2) in these circumstances to be appropriate rather than "rare and novel."
B. 18 U.S.C. § 371: Conspiracy
The crime of conspiring to defraud the United States is set out in 18 U.S.C. § 371, which provides in pertinent part:
18 U.S.C. § 371.
Appellant argues that the evidence was insufficient to show that he was a member of a conspiracy or that he had the specific intent to aid in the preparation of the false tax return.
Our standard of review remains the same as with the first issue. We will reverse a conviction for insufficient evidence only if no rational trier of fact could have found the defendant guilty beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. at 319, 99 S.Ct. at 2789; United States v. Collazo, 815 F.2d at 1142, 1144. After a jury verdict in favor of the government, "[i]t is not for us to weigh the evidence or to determine the credibility of witnesses. The verdict of the jury must be sustained if there is substantial evidence, taking the view most favorable to the government, to support it." Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942). Under this standard, therefore, the appellant has a heavy burden. United States v. Peters, 791 F.2d 1270, 1290 (7th Cir.), cert. denied sub nom. Odoner v. United States, ___ U.S. ___, 107 S.Ct. 168, 93 L.Ed.2d 106 (1986).
The government had the burden of proving at trial these elements in order to sustain a conviction for conspiracy under § 371:
(1) an agreement to accomplish an illegal objective against the United States;
(2) one or more overt acts in furtherance of the illegal purpose; and
(3) the intent to commit the substantive offense.
United States v. Dahlstrom, 713 F.2d at 1429, citing United States v. Melchor-Lopez, 627 F.2d 886 (9th Cir.1980).
The Supreme Court has broadly interpreted the scope of this statutory conspiracy "to defraud ... in any manner or for any purpose" to include any fraud that "reaches `any conspiracy for the purpose of impairing, obstructing or defeating the lawful function of any department of Government.'" Tanner v. United States, ___ U.S. ___, 107 S.Ct. 2739, 2751, 97 L.Ed.2d 90 (1987), quoting Dennis v. United States, 384 U.S. 855, 861, 86 S.Ct. 1840, 1844, 16 L.Ed.2d 973 (1966), quoting in turn Haas v. Henkel, 216 U.S. 462, 479, 30 S.Ct. 249, 253, 54 L.Ed. 569 (1910). In an earlier case, Ingram v. United States, 360 U.S. 672, 79 S.Ct. 1314, 3 L.Ed.2d 1503 (1959), the Court had interpreted the third element of a section 371 offense. Evaluating a section 371 prosecution of conspiracy to evade taxes, the Court found that the government need not prove "that the conspirators were aware of the criminality of their objective," but it must show that they knew of the liability for federal taxes. "[C]onspiracy to commit a particular substantive offense cannot exist without at least the degree of criminal intent necessary for the substantive offense itself." 360 U.S. at 678; 79 S.Ct. at 1319.
The essence of the crime of conspiracy is a "combination or confederation between two or more persons formed for the purpose of committing, by their joint efforts, a criminal act." United States v. Herrera, 757 F.2d 144, 149 (7th Cir.1985) (quoting United States v. Mayo, 721 F.2d 1084, 1088 (7th Cir.1983)). Because a conspiracy is by its nature secret, its existence and common purpose must often be proved by circumstantial evidence. "The government need not establish that there existed a formal agreement to conspire; circumstantial evidence and reasonable inferences drawn therefrom concerning the relationship of the parties, their overt acts, and the totality of their conduct may serve as proof." United States v. Redwine, 715 F.2d 315, 320 (7th Cir.1983), cert. denied, 467 U.S. 1216, 104 S.Ct. 2661, 81 L.Ed.2d 367 (1984). See also United States v. Krasovich, 819 F.2d 253, 255 (9th Cir.1987). Circumstantial evidence may include whether the defendant has a stake in the outcome of the conspiracy. U.S. v. Collazo, 815 F.2d at 1143, quoting United States v. Xheka, 704 F.2d 974, 988 (7th Cir.), cert. denied,
Hooks contends that the acts and conversations attributed to Hooks by witnesses and co-conspirators at trial were innocent on their face and did not support an inference of an agreement to defraud the United States. Since no witness testified to an agreement between Mrs. Loge and the appellant, he claims that there was no proof that Hooks joined a conspiracy.
This position finds no support in the evidence. Testimony at trial adduced that Mrs. Loge and Mrs. Hooks gave ten bearer bonds to the defendant rather than to the bank for inclusion in Floyd Loge's estate. After secreting the bonds in Walter Craig's safe deposit box, Hooks then turned them over to defendant Richter for liquidation in a manner intended to conceal their connection both with himself and with the Loge estate. Richter told bond broker Finley that he could not disclose the name of the bond owner because "they were trying to keep the bonds out of a ten million dollar estate."
This is clearly a "case where efforts at concealment would be reasonably explainable only in terms of motivation to evade taxation." Ingram, 360 U.S. at 679, 79 S.Ct. at 1320. It was a reasonable inference on the part of the jury that Hooks was the person who informed Richter that the bonds were part of an estate. It was also reasonable for the jury to believe that a common plan existed among Mrs. Loge and/or Mrs. Hooks (who gave Hooks the bonds and denied their existence when questioned by the bank), Hooks (who concealed the bonds and arranged for their secret sale) and Richter (who disposed of the bonds without revealing the identity of the present and past owners). And, finally, the jury could reasonably infer that Hooks had a financial interest and stake in the successful outcome of the scheme. See Collazo, 815 F.2d at 1143. The evidence was ample to support the jury's finding that Hooks, in concert with the other conspirators, actively assisted in keeping the bonds out of the estate and thus untaxed, thereby defeating the lawful functions of the IRS in the ascertainment and collection of federal estate taxes. 18 U.S.C. § 371.
We conclude that there was substantial evidence of Hooks' knowing participation in a conspiracy to defraud the government in its efforts to collect estate taxes. There is no justification for reversing appellant's conviction under 18 U.S.C. § 371.
III. Admissibility of Evidence
Appellant Hooks has presented two contentions of error concerning the admissibility of evidence at trial: the admission of a hearsay statement by Hooks' co-defendant and co-conspirator; and the exclusion of the exculpatory written statements of unindicted co-conspirators Celia May Loge and Patricia Hooks.
It is well settled in this circuit that the trial judge has broad discretion concerning the admissibility of evidence, and that a reviewing court gives special deference to the evidentiary rulings of the trial court. United States v. Kaden, 819 F.2d 813, 818 (7th Cir.1987). Accordingly, this appellate court will neither substitute its judgment nor reverse the decision below absent a showing that the trial court abused its discretion. United States v. Conley, 826 F.2d 551, 559 (7th Cir.1987), citing United States v. Buishas, 791 F.2d 1310, 1313 (7th Cir.1986); United States v. Harris, 761 F.2d 394, 398 (7th Cir.1985).
A. Co-conspirator Exception to the Hearsay Rule
Hooks asserts that it was error for the district court to have permitted the following hearsay testimony of Harold Finley, the broker to whom defendant Patrick Richter first took the bearer bonds to be cashed:
Trial transcript at 726-28 (emphasis added).
Under Federal Rule of Evidence 801(d)(2)(E),
In United States v. Santiago, supra, this circuit established that the admissibility determination concerning co-conspirator hearsay must be shown by a preponderance of the evidence. 582 F.2d at 1134-35. The Supreme Court has recently explained the reason for holding an offering party to that standard of proof:
Bourjaily v. United States, ___ U.S. ___, 107 S.Ct. 2775, 2778-79, 97 L.Ed.2d 144 (1987) (citations omitted).
A reviewing court will reverse the district court's findings with respect to these elements only if they are clearly erroneous. Kaden, 819 F.2d at 819, quoting United States v. Williams, 737 F.2d 594, 609 (7th Cir.1984), cert. denied, 470 U.S. 1003, 105 S.Ct. 1354, 84 L.Ed.2d 377 (1985).
The abovequoted testimony of Harold Finley contained the hearsay statement of co-defendant Richter at issue: "Well, we are trying to keep them out of a ten million dollar estate." Counsel for Hooks called a side bar and sought to exclude the declaration as to defendant Hooks. The district court judge noted that the government had already presented a Santiago proffer of
After the government rested and the jury was excused, the court allowed further argument from all parties regarding the court's conditional admission of hearsay co-conspirator statements under the Santiago proffer. The court then concluded that the statements were admissible:
Trial Transcript at 1352.
The propriety of this manner of receiving co-conspirator statements into evidence has been approved by this circuit. See United States v. Andrus, 775 F.2d 825, 837 (7th Cir.1985). The government's preliminary proffer and the court's initial determination and later scrutiny sufficiently protect the defendant's rights under Santiago. United States v. Shoffner, 826 F.2d 619, 628-30 (7th Cir.), cert. denied sub nom. Stange v. United States, ___ U.S. ___, 108 S.Ct. 356, 98 L.Ed.2d 381 (1987); Boucher, 796 F.2d at 974-75.
Santiago required, and the trial court found, that evidence independent of the hearsay testimony show that a conspiracy existed and that the defendant was a member. That mandate for proof through independent facts was established by Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942), and affirmed in United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974). In its recent decision, Bourjaily v. United States, however, the Supreme Court has eliminated that "independent evidence" test. ___ U.S. ___, 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987). The Court pointed out that the Federal Rules of Evidence, enacted in 1975, now govern the treatment of evidentiary questions in federal courts. Rule 104, which "on its face allows the trial judge to consider any evidence whatsoever, bound only by the rules of privilege," prevails over previous evidentiary tests. 107 S.Ct. at 2780. On that basis the Court held "that a court, in making a preliminary factual determination under Rule 801(d)(2)(E), may examine the hearsay statements sought to be admitted." 107 S.Ct. at 2782.
This circuit has recognized the change in the foundation for the admission of hearsay under that rule. See, e.g., United States v. Zambrana, 841 F.2d 1320, 1343-47 (7th Cir.1988); United States v. Van Daal Wyk, 840 F.2d 494, 496 (7th Cir.1988); United States v. Potts, 840 F.2d 368, 371 (7th Cir.1987); United States v. Garner, 837 F.2d 1404, 1415 (7th Cir.1987). We therefore no longer require a showing of the conspiracy and of the defendant's
In this case, in which the trial judge followed the stricter Santiago test previously espoused by this circuit, the court properly considered evidence independent of the hearsay in finding that the government had established by a preponderance of the evidence that there was a conspiracy in which both the defendant Hooks and co-defendant Richter were involved. We conclude, after examination of the entire record, that the district court's factfinding was not clearly erroneous and hold that the out-of-court co-conspirator statements were properly admitted against defendant Hooks.
B. Unavailable Declarant Exception to the Hearsay Rule
Hooks argues that the transcribed statements of Celia May Loge and Patricia Hooks, made to the prosecutor on August 6, 1985 in the presence of their attorney, were improperly barred from the trial by the district court. Because the statements would rebut the charges of an agreement between Mrs. Loge and Hooks and any intent to conspire, they were indispensable to Hooks' position that there was no conspiracy.
Hooks sought admission of the transcribed statements under Federal Rule 804(b)(5) of Evidence,
This court has recently reviewed the Rule 804(b)(5) hearsay exception in United States v. Guinan, 836 F.2d 350, 353-58 (7th Cir.1988). We noted that the criteria for Rule 804(b)(5) are stringent, United States v. Boulahanis, 677 F.2d 586, 588 (7th Cir.), cert. denied, 459 U.S. 1016, 103 S.Ct. 375, 74 L.Ed.2d 509 (1982), and that the "trial judge has a considerable discretion, within the parameters of the rules of evidence, in determining whether ... hearsay statements contain the necessary circumstantial guarantees of trustworthiness." 836 F.2d at 354, quoting United States v. Vretta, 790 F.2d 651, 659 (7th Cir.), cert. denied, ___ U.S. ___, 107 S.Ct. 179, 93 L.Ed.2d 115 (1986) (citations omitted).
Out-of-court statements are generally inadmissible because they are presumed to be unreliable. The party wishing to introduce hearsay evidence must rebut that presumption of unreliability by appropriate proof of "trustworthiness." (See Fed.R.Evid. 803(24), 804(b)(5).) It is the task of the trial court "to evaluate these statements for their evidentiary worth as revealed by the particular circumstances of the case." Bourjaily v. United States, 107 S.Ct. at 2781.
The statement of an unavailable declarant is admissible under Rule 804(b)(5) only if it has the "equivalent circumstantial
A declarant's statement is trustworthy when it is made under oath and subject to prosecution for perjury, is given without coercion, and is corroborated by other testimony or evidence. Boulahanis, 677 F.2d at 588. Another indicium of reliability is the declarant's disinterest; the testimony of a "mere bystander with no axe to grind" tends to be more trustworthy. Boulahanis, supra. Although these factors are neither necessary in themselves nor exhaustive as a list of prerequisites for admissibility of statements under Rule 804(b)(5), they offer valid guidelines for the determination of the trustworthiness of hearsay testimony. Guinan, at 355. See, e.g., United States v. Howard, 774 F.2d 838, 845-46 (7th Cir.1985). However, every case must be analyzed on its own facts.
In the case herein, virtually none of these factors is found. Mrs. Loge and Mrs. Hooks were certainly not mere by-standers. Their statements, in the face of possible indictment, were suspiciously self-serving. Following a recess for an examination of the transcript of the interview with Mrs. Loge and Mrs. Hooks, the court made the following findings:
Tr. at 1920-21.
We agree with the district court's evaluation. The August 6, 1985 interview was held in the prosecutor's office at the end of a four-year investigation and prior to indictment. Mrs. Loge's responses were hesitant, brief, and frequently interrupted by Mrs. Hooks and her attorney. The written statement was actually typed notes made by an individual in the room; it was not a stenographic record of the interview. The prosecutor asserts that it differs significantly from their notes of the meeting. Considering the circumstances under which the unsworn testimony was given, it is more likely than not that Mrs. Loge and Mrs. Hooks had motive to testify falsely. No other factors in those circumstances rendered the statements reliable. The requisite indicia of trustworthiness not found, the court refused to admit the exculpatory self-serving statements.
In light of the court's analysis of the trustworthiness of the statements at issue and its consideration of the subsequent offers of proof by counsel for both defendants, we find that the parties were accorded a full and fair hearing of the admissibility of this hearsay testimony of the witnesses who were unavailable by virtue of their fifth amendment privilege. After reviewing the record and briefs submitted, we find that the appellant failed to rebut the presumption of unreliability by a "showing of particularized guarantees of trustworthiness." Ohio v. Roberts, 448 U.S. 56, 67, 100 S.Ct. 2531, 2538, 65 L.Ed.2d 597 (1980). We further find that the trial court's determination was not an abuse of its discretion, and therefore uphold its decision to exclude the hearsay testimony of Mrs. Loge and Mrs. Hooks.
IV. Defense Witness Immunity
Counsel for Celia May Loge and Patricia Hooks appeared before the court, out of the presence of the jury, to notify the court that he had advised his clients to assert their fifth amendment privilege against self-incrimination; and, indeed, Mrs. Loge and Mrs. Hooks did refuse to testify on that ground when called to the stand. The trial court found that both witnesses had a good-faith basis for asserting their fifth amendment right, since they could be the subject of criminal prosecution. The court also found that there had been no showing of threats or intimidation by the government against the two women that had influenced their decision not to testify. When Hooks' attorney asked the government to immunize the witnesses, the prosecutor refused. When he then asked the court to confer immunity on the witnesses, the trial judge stated that the court was powerless to do so.
Appellant contends that the prosecution should have sought immunization for Mrs. Loge and Mrs. Hooks following their fifth amendment declaration. He claims that he was deprived of due process of law because the prosecutor and the court refused to grant immunity to these two defense witnesses while conferring immunity on prosecution witness Walter Craig in exchange for his cooperation with the government. According to the appellant, this improperly selective use of immunity distorted the judicial fact-finding process and thus was an abuse of the government's and the court's discretion.
A federal prosecutor's right to grant immunity to a witness is governed by statute. 18 U.S.C. §§ 6002, 6003.
The trial court lacks authority to provide immunity for a defense witness absent a request by the government. Heldt, 668 F.2d at 1282 (citing cases from other circuits). Indeed, the court is powerless to direct the government to seek immunity for a defense witness who exercises his fifth amendment privilege against self-incrimination. United States v. Frans, 697 F.2d 188, 191 (7th Cir.), cert. denied, 464 U.S. 828, 104 S.Ct. 104, 78 L.Ed.2d 107 (1983). The Second Circuit has characterized the deference to be paid by the court to the prosecution's refusal to grant use immunity to a witness:
United States v. Turkish, 623 F.2d 769, 778 (2d Cir.1980), cert. denied, 449 U.S. 1077, 101 S.Ct. 856, 66 L.Ed.2d 800 (1981).
Nevertheless, the prosecutor's power to seek or to refuse to seek immunity is limited by the constitutional right to due process of the law. Accordingly, this appellate court "will not review a prosecutor's immunization decisions in the absence of substantial evidence showing that the prosecutor's actions amounted to a clear abuse of discretion violating the due process clause." Taylor, 728 F.2d at 935, quoting United States v. Wilson, 715 F.2d 1164, 1173 (7th Cir.), cert. denied, 464 U.S. 986, 104 S.Ct. 434, 78 L.Ed.2d 366 (1983). The prosecutor has abused his discretion when he intends to use his authority to distort the judicial fact-finding process. Frans, 697 F.2d at 191.
The appellant asserts that the prosecutor, aware of the exculpatory nature of the testimony of Mrs. Loge and Mrs. Hooks and its inconsistency with the government's circumstantial evidence, kept their evidence from the jury by not offering them immunity. In order further to accomplish this plan, Hooks suggests, the government threatened possible prosecution of the two women for perjury and false statement, thereby intimidating them sufficiently to deter them from testifying.
We will consider first the allegation of threats by the government.
A fundamental element of due process of law is the right of an accused to present witnesses in his own defense. Washington v. Texas, 388 U.S. 14, 87 S.Ct. 1920, 18 L.Ed.2d 1019 (1967); Burrus v. Young, 808 F.2d 578, 581 (7th Cir.1986). Those witnesses must be "free to testify without fear of governmental retaliation." United States v. Blackwell, 694 F.2d 1325, 1334 (D.C.Cir.1982). See United States v. Goodwin, 625 F.2d 693, 703 (5th Cir.1980).
Blackwell, 694 F.2d at 1334.
Three cases clearly illustrate the infringement of a defendant's due process rights by threats and warnings made to a defense witness. In Webb v. Texas, 409 U.S. 95, 93 S.Ct. 351, 34 L.Ed.2d 330 (1972), a witness refused to testify for the defendant after the trial judge gratuitously singled him out for a lengthy admonition of the dangers and dire consequences of perjury. In United States v. Morrison, 535 F.2d 223 (3d Cir.1976), the defense witness asserted her fifth amendment rights because the prosecutor had sent her repeated warnings of her liability to prosecution and
The Fifth Circuit has recently examined in detail the issue of prosecutorial intimidation of a defense witness in United States v. Viera, 839 F.2d 1113 (5th Cir.1988). When the trial commenced, the father of the defendant, Gaspar Viera, was sworn in as a defense witness. However, the prosecutor disclosed that he had evidence implicating Gaspar Viera in several drug transactions with his son Anthony. The court described the prosecutor's subsequent comments thus:
United States v. Viera, 819 F.2d 498, 500 (5th Cir.1987).
Defendant's attorney decided not to call Gaspar Viera to testify, but objected to the prosecutor's conduct and moved for a mistrial. The court denied the motion for mistrial, but noted that the prosecutor's statements were in poor taste. Before resting his case, defense counsel told the court that he did not call Viera's father to testify because the prosecutor had publicly stated that he would indict the witness. The prosecutor responded that he had simply informed counsel that the father's possible complicity in drug dealing might pose problems for the defendant and the witness if the father were to testify. The court stated that such information did not hinder the defense from calling the father as a witness.
The Fifth Circuit originally found "that the prosecuting attorney impermissibly infringed on appellant's right to present witnesses on his behalf[;] and because no immediate curative instruction was issued by the trial court following the prosecutor's improper comments, we reverse appellant's conviction." 819 F.2d at 502.
When the case was reheard en banc, however, the full panel reversed that decision. The majority, eleven of the fifteen circuit judges, gave two reasons for finding no violation of the appellant's constitutional right to present testimony on his own behalf. The first was the lack of evidence to show that the prosecutor's intimidation had caused Gaspar Viera not to testify.
839 F.2d at 1115.
The second was the court's determination that the prosecutor's actions did not impermissibly prejudice the defendant. A statement by the prosecutor, attached to his brief, explained his conduct to the court:
Id. The court found no fault in that justification and upheld his conduct.
Over a vigorous dissent by four circuit judges, the Fifth Circuit affirmed the defendant's conviction.
We now examine the circumstances of this case to determine whether the prosecutor improperly threatened or warned the witnesses.
The transcript reflects that the prosecutor did state to the court and counsel for witnesses that Mrs. Loge and Mrs. Hooks could possibly be prosecuted for perjury and false statements. However, it was clear that the possibility was unlikely, particularly for Mrs. Loge, whose age and health were significant factors being considered by the government. In spite of the attempts by defendant's counsel to prove that the government was intimidating the women by threatening prosecution, the attorney representing both women made clear that their decision not to testify was entirely their own, upon his advice.
The circumstances herein in no way resemble those found in Webb or Morrison. Counsel for Mrs. Loge and Mrs. Hooks told the court that he advised his clients to invoke their fifth amendment privilege. It is clear that the government was not responsible for their decision. Nor did the prosecutor state that he would indict the witnesses if they testified, as occurred in Viera. Neither the appellant nor the court refers to any other actions reflecting misconduct or bad faith on the part of the prosecutor. We have found no government interference with the defense witnesses' choice not to testify. Indeed, we find the allegation by Hooks totally without merit.
We turn now to appellant's contention that the government's withholding of immunity distorted the fact-finding process by keeping their exculpatory evidence from the jury.
When counsel for defendant Hooks requested immunity for Mrs. Loge and Mrs. Hooks, the prosecutor responded that it did not intend to offer immunity to them because it was not "in the best interest of justice." The government has broad discretion in its grants of immunity. It is the prerogative of the Attorney General and his designees to determine whether a grant of immunity is "in the public interest" under 18 U.S.C. § 6003. In re Perlin, 589 F.2d 260, 269 (7th Cir.1978). The district court's function in this regard is largely ministerial; it does not have the discretion to consider the public interest. Id.
The prosecutor herein mentioned certain statements made by the two women that the government knew or believed to be false. It is well within the discretion of a prosecutor under 18 U.S.C. § 6003 to decline immunity to a witness who could be charged for false statement and perjury. See Taylor, 728 F.2d at 935 (prosecutor acted within his discretion in revoking the immunity of a witness whose prior testimony had been discovered to be false). Indeed, it is his prerogative to decide not to seek immunity simply because the government would gain nothing and the immunity would hinder future actions. Frans, 697 F.2d at 191.
This circuit requires a defendant to make a substantial evidentiary showing that the government intended to distort the judicial fact-finding process before we will depart from the strong tradition of deference to prosecutorial discretion. Id. See United States v. Herman, 589 F.2d 1191, 1203-04 (3d Cir.1978), cert. denied, 441 U.S. 913, 99 S.Ct. 2014, 60 L.Ed.2d 386 (1979). The appellant herein, unable to present even minimal evidence of actions by the government that distorted the fact-finding process, has not met his burden of proving the prosecutor's abuse of discretion.
Also without merit is appellant's assertion that the prosecutor's granting of immunity to Walter Craig while refusing to grant it to Mrs. Loge and Mrs. Hooks was a violation of the appellant's due process rights. "[A] trial is not a `symmetrical proceeding' which requires a court to grant the defendant's witnesses immunity because the government uses immunized witnesses." United States v. Thevis, 665 F.2d 616, 641 n. 28 (5th Cir.), cert. denied, 459 U.S. 825, 103 S.Ct. 57, 74 L.Ed.2d 61 (1982), citing United States v. Turkish, 623 F.2d 769, 774-75 (2d Cir.1980), cert. denied, 449 U.S. 1077, 101 S.Ct. 856, 66 L.Ed.2d 800 (1981). We do not find that the government's selective grants of immunity have produced "egregiously lopsided access to
Hooks' assertion that the court abused its discretion by not granting the immunity is equally without merit. The court itself is powerless to grant immunity and is obligated to defer to the immunization decision of the prosecutor unless the prosecutor's conduct exceeds the bounds of the due process clause. Taylor, 728 F.2d at 935. After hearing argument by all counsel concerning the prosecutor's alleged intimidation, possible charges against the witnesses, and reasons for the prosecutor's decision not to immunize the witnesses, the court found that the government's refusal to grant immunity was proper. The court in no way abused its discretion in this determination.
Based on a thorough review of the record and reviewing the evidence in the light most favorable to the prosecution, we hold that any rational trier of fact could have found beyond a reasonable doubt the elements of the offenses of 26 U.S.C. § 7206(2) and 18 U.S.C. § 371. We further hold that the trial court did not abuse its discretion in admitting the hearsay statements of co-conspirator Patrick Richter and in excluding the unsworn self-serving testimony of Mrs. Loge and Mrs. Hooks. Finally, we hold that the defendant failed to present substantial evidence showing that the conduct of either the prosecutor or the court in refusing to grant immunity amounted to a clear abuse of discretion. The appellant's constitutional guarantee of due process has not been violated by the government's denial of immunity to two defense witnesses. Accordingly, we affirm the conviction of the appellant.
18 U.S.C. § 6003 provides:
(a) In the case of any individual who has been or may be called to testify or provide other information at any proceeding before or ancillary to a court of the United States or a grand jury of the United States, the United States district court for the judicial district in which the proceeding is or may be held shall issue, in accordance with subsection (b) of this section, upon request of the United States attorney for such district, an order requiring such individual to give testimony or provide other information which he refuses to give or provide on the basis of his privilege against self-incrimination, such order to become effective as provided in section 6002 of this part.
(b) A United States attorney may, with the approval of the Attorney General, the Deputy Attorney General, or any designated Assistant Attorney General, request an order under subsection (a) of this section when in his judgment
Trial Transcript at 1883-86.